Difference between revisions of "Key Person Risk"
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== Definition == | == Definition == | ||
− | '''Key Person Risk''' indicates the | + | '''Key Person Risk''' indicates the [[Risk]] generated when significant organizational knowledge, visibility, status or performance rely to a significant degree on a single individual. |
+ | |||
+ | The reliance on a key person exposes the organization to the risk of significant financial or reputational loss if | ||
+ | * the individual ceases to be part of the organization (e.g. due to health, career choices etc.) | ||
+ | * stops performing or behaving according to expectations and agreements | ||
== Issues and Challenges == | == Issues and Challenges == | ||
− | Key person risk is a form of [[Concentration Risk]], | + | Key person risk is a form of [[Concentration Risk]], but it is not traditionally discussed alongside the traditional types of [[Concentration]] as the structure of an [[Organization]] is usually not subject to formal [[Risk Analysis]]. |
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[[Category:Human Resources]] | [[Category:Human Resources]] |
Latest revision as of 15:54, 25 September 2021
Definition
Key Person Risk indicates the Risk generated when significant organizational knowledge, visibility, status or performance rely to a significant degree on a single individual.
The reliance on a key person exposes the organization to the risk of significant financial or reputational loss if
- the individual ceases to be part of the organization (e.g. due to health, career choices etc.)
- stops performing or behaving according to expectations and agreements
Issues and Challenges
Key person risk is a form of Concentration Risk, but it is not traditionally discussed alongside the traditional types of Concentration as the structure of an Organization is usually not subject to formal Risk Analysis.